The Wharton School
University of Pennsylvania
3620 Locust Walk
Philadelphia, PA 19104-6367
Institutional Affiliation: University of Pennsylvania
Information about this author at RePEc
NBER Working Papers and Publications
|September 2016||Standing on the Shoulders of Giants: The Effect of Passive Investors on Activism|
with Ian R. Appel, Todd A. Gormley: w22707
We analyze whether the growing importance of passive investors has influenced the campaigns, tactics, and successes of activists. We find activists are more likely to pursue changes to corporate control or influence (e.g., via board representation) and to forego more incremental changes to corporate policies when a larger share of the target company’s stock is held by passively managed mutual funds. Furthermore, higher passive ownership is associated with increased use of proxy fights and a higher likelihood the activist obtains board representation or the sale of the targeted company. Overall, our findings suggest that the increasingly large ownership stakes of passive institutional investors mitigate free-rider problems associated with certain forms of intervention and ultimately increas...
|January 2016||Simplifying Choices in Defined Contribution Retirement Plan Design|
with Olivia S. Mitchell: w21854
In view of the growth and popularity of defined contribution pensions, along with the government’s growing attention to retirement plan costs and investment choices provided, it is important to understand how people select their retirement plan investments. This paper shows how employees in a large firm altered their fund allocations when the employer streamlined its pension fund menu and deleted nearly half of the offered funds. Using administrative data, we examine the changes in plan participant investment choices that resulted from the streamlining and how these changes might affect participants’ eventual retirement wellbeing. We show that streamlined participants’ new allocations exhibited significantly lower within-fund turnover rates and expense ratios, and we estimate this could le...